HP 2008 Annual Report Download - page 107
Download and view the complete annual report
Please find page 107 of the 2008 HP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97 -
98 -
99 -
100 -
101 -
102 -
103 -
104 -
105 -
106 -
107 -
108 -
109 -
110 -
111 -
112 -
113 -
114 -
115 -
116 -
117 -
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
 |
 |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2: Stock-Based Compensation (Continued)
The following assumptions were used to determine the fair value of the PRU awards for the first
year:
2008
Expected volatility(1) ........................................................ 26%
Risk-free interest rate ....................................................... 3.13%
Dividend yield ............................................................ 0.7%
Expected life in months ...................................................... 33
(1) HP uses historic volatility for PRU awards as implied volatility cannot be used when simulating
multivariate prices for companies in the S&P 500.
Nonvested performance-based restricted units as of October 31, 2008 were as follows:
Shares
In thousands
Nonvested at October 31, 2007 ............................................ —
Granted ............................................................ 8,783
Change in shares due to performance and market conditions ...................... 2,492
Vested ............................................................. —
Forfeited ........................................................... (310)
Nonvested at October 31, 2008 ............................................ 10,965
As of October 31, 2008, $108 million of total unrecognized compensation cost related to
performance-based restricted units for the first year is expected to be recognized over a weighted-
average period of 2.0 years.
Stock-based Compensation Expense and the Related Income Tax Benefits
HP allocated stock-based compensation expense as follows for each of the fiscal years:
2008 2007 2006
In millions
Cost of sales ................................................. $152 $161 $144
Research and development ...................................... 72 74 70
Selling, general and administrative ................................. 382 394 322
Stock-based compensation expense before income taxes ................. 606 629 536
Income tax benefit ............................................ (178) (182) (160)
Total stock-based compensation expense after income taxes(1) ............. $428 $447 $376
(1) Includes $105 million, $84 million and $58 million of stock-based compensation expense, net of
taxes, relating to stock awards assumed through acquisitions and restricted stock awards granted in
fiscal 2008, 2007, and 2006, respectively.
101